That’s a lot of money, even for Google, which had $38 billion in revenues in 2011. The investments don’t appear to be core to the company’s mission of organizing information, and they have attracted criticism, as well as some careless reporting, implying that the Internet giant is exiting the alternative energy business.

Does Google have an energy policy? Does it need one?

To find out, I recently went to see Rick Needham, Google’s director of green business operations, at the company’s fabled headquarters (well, fabled for a 13-year-old company, anyway) in Mountain View, CA.

I came away not merely persuaded that Google’s energy investments make sense, but thinking that other companies that consume lots of electricity and have a pile of cash on their balance sheets — Apple, Microsoft and GE come to mind — should consider deploying some of their cash in the clean energy sector.

Clean-energy investing isn’t philanthropy for Google. It’s business. In fact, it’s a classic double-bottom line investment, one that is intended to deliver environmental as well as financial benefits.

“We originally came at this by asking how we can make ourselves a more sustainable company,” Needham told me. But Google executives have come to believe that the company can generate healthy, long-term returns by investing in wind farms, utility-scale solar plants and even solar photovoltaic panels on the rooftops of homes and businesses. “It’s a way of helping us to diversify our cash, put it into businesses that can earn good returns and that aren’t correlated to other investments,” Needham said.

Rick Needham

Needham, who is 41, has an interesting background. He’s a graduate of the US Naval Academy, has a master’s in aeronautical engineering from MIT and an MBA from Harvard. He spent eight years as a submarine officer, and then worked for Dean Kamen at DEKA Research on a project to develop a cleaner burning combustion engine. He’s been with Google since 2008.

Press reports last fall indicated that Google was dropping its clean-energy initiatives. Wrong. What happened was that the company shut down a small group of engineers who were researching solar power, among other things. The company is still working aggressively on data-center efficiency, procuring clean power for its data centers and investing in clean-energy projects elsewhere, as Needham explained.

Google isn’t betting on any one kind of renewable power because its executives believe that wind, solar thermal and solar PV all have a role to play in generating electricity. “The source of energy in the future is going to be clean energy,” Needham said, but no single source will dominate. “You wouldn’t put a solar on the windy planes of North Dakota if you could put a turbine there,” he noted.

While clean energy deployment still depends on government subsidies, he said: “We’re getting to the place where the technology will allow you to have a low cost of power. Costs of wind turbine have come down. Costs of PV have dropped, just 40 percent in the last year. It’s amazing how the cost curves have come down.”

All of Google’s large-scale energy investments (as opposed to its smaller, venture-like bets on startup companies) have two things in common. First, they are tied to specific projects which should deliver a steady stream of long-term revenues; utilities, businesses or individuals (in the case of rooftop solar) have agreed to purchase the power that these projects produce for a decade or two. Second, they are tax equity investments, under which the lenders–Google in this case, but typically big financial institutions–invest in renewable energy projects and become eligible for credits that offset their federal corporate tax obligations.

Tax equity investments are important to the future of renewable energy because other federal subsidies, notably a U.S. Treasury cash grant, have expired or are in danger of being phased out. According Bloomberg New Energy Finance, which researched tax equity finance for the Reznick Group, a big accounting and tax firm with a clean energy practice, the wind industry alone will require about $2.4 billion of third-party tax equity financing in 2012. The Bloomberg report [PDF, download] says:

Incorporating other renewable generation sectors, the total tax equity financing need could be more than $7bn. That requirement exceeds the investment appetite of the established tax equity providers, according to a clean energy trade group. Yet there is a vast pool of potential incremental tax equity supply: the 500 largest public companies in the US alone paid $137bn in taxes over the past year.

This is where Google is filling an important financial gap. Other companies could, too. Apple recently reported eye-popping earnings which left it with $97 billion cash and short-term investments (although much of it is parked overseas). GE has $78 billion. Toyota has $48 billion. Microsoft has $43 billion. Here’s a list from the WSJ of the companies with big cash hoards.

For relatively good but not necessarily exceptional renewable projects, the internal rates of return (IRR) and net present values (NPV) for most of these structures can meet hurdle rates for both developers and investors.

So why aren’t more companies investing in clean energy? Hard to say. Maybe they’re risk averse, or they find it hard to think outside the box. Maybe they’re saving their cash for acquisitions, or hoping that interest rates will rise.

For his part, Needham says about Google: “We’re lucky to be working at a company that instead of asking why, asks why not?”

Marc Gunther is a writer and speaker who focuses on business and the environment. He worked for 12 years as a senior writer at FORTUNE magazine, where he is now a contributing editor. His most recent book, "Faith and Fortune: How Compassionate Capitalism is Transforming American Business," was published by Crown in 2004.